Financial Management

Budgets are the financial mainstay in most non-profit organizations and for their funders. Yet they are remarkably small value in an outcome framework.

A funder looks at two proposals and sees that one group is paying case managers $20,000 and the other $40,000. Not comparison, they say—this group can get two people for the price of one at the other agency. But cost alone can be misleading. We may learn, for example, that the $20,000 case manager sees 6 persons a week and gets one of the a job, while the $40,000 person sees 10 persons and gets 4 of them a job. Which is the better investment?

Our approach to financial management helps non-profits build cost projections connected to achievement. We help groups to shift from a budget to a project cost-out based on what money it will take to achieve each milestone of customer progress. Without this tool, a group may say they are on course because it is half way through the year and has spent half the money. Yes, but is it half way to the results needed?

We help non-profits to cost account time and other expenses to various functions (e.g., strategic planning) and on going operations (such as meetings) such that they always know the true cost of everything they do. We also look at how to best distribute overhead onto units of results such as to know and communicate to funders the true cost of achieving gains.

Another focus is creating systems such that all program staff—down to the direct service level—have and can use financial information. In high performing groups, money management is everyone’s business, both to control coss and allocate resources in the best way to achieve gain.